$10,000
5.00%
10 years
(10 periods)
Future Value:
$16,288.95
Total Interest Earned:
$6,288.95
Growth Multiple:
1.629x
Periodic Rate:
5.000%
EAR (annualized):
5.000%
The Right Thing
FV = PV × (1 + rper)N
rper = rate per period
N = total number of periods
EAR = (1 + rper)m − 1 where m = periods per year
N = total number of periods
EAR = (1 + rper)m − 1 where m = periods per year
The EAR is just the periodic rate compounded up to a year.
It's the honest answer to "what annual rate does this investment actually earn?" No tricks, no conventions -- just compounding.
| Year | Value | Growth That Year | Cumulative Interest |
|---|